ADB supports RP energy restructuring

The Asian Development Bank (ADB) called the country’s power sector reform program as "appropriate" and expressed support for its privatization efforts.

ADB Director General for Southeast Asia Shamshad Akhtar said the power sector reform agenda being pursued by the (Philippine) government is appropriate.

"The government’s comprehensive agenda addresses issues of ownership, industry structure, competition, pricing, and regulation. We are seeing progress in each of these areas. ADB is keen to work closely with the government and other development partners to facilitate the process, which is essential if the country is to meet its broader development objectives," Akhtar said.

The Philippines is one of the first of ADB’s developing member countries (DMCs) to implement privatization of generation assets. The country was also among those countries which entered first into concessionaire agreements for the operation of transmission assets as well as one of the pioneers in the wholesale electricity spot market.

Akhtar called the Philippines’ effort as an ambitious and complex task given the prevailing economic environment.

"It requires close coordination, spread over a relatively long period of time, on the legislative, regulatory, and policy measures," the ADB director general said.

The Manila-based regional financial institution has provided a number of loans for the country’s generation and transmission projects, as well as the government’s power sector restructuring program.

The bank has provided technical assistance grants for capacity building of the Department Energy (DOE) and the Energy Regulatory Commission (ERC).

Two years ago, it provided a $500-million partial credit guarantee to support debt financing by the Power Sector Assets and Liabilities Management Corp. (PSALM), enabling the agency to obtain financing for the National Power Corp. (Napocor) at lower rates and for longer tenors.

The DOE said that the government would pursue reforms in the power sector, as mandated under the Electric Power Industry Reform Act (2001).